How much extra do I need to pay to cancel PMI a year early?

Roughly speaking, you need to retire enough principal one year ahead of schedule. On a $380,000 loan amortizing toward 80% LTV, that's typically $5,000–$10,000 of extra principal applied in the year before the target milestone. The exact number depends on your rate and remaining term — check your specific scenario in the calculator.

Will the servicer cancel PMI automatically if I prepay enough?

No. Automatic 78% termination is based on the original amortization schedule. If you've prepaid to where your actual balance is below 80% of original value, you have to file a written request — the servicer is allowed (and often required) to cancel based on it.

Should I prepay or save up for a 20% down purchase next time?

Different question entirely. Prepaying accelerates current PMI cancellation. Saving up changes the next purchase. Both can make sense — neither is universally better.

PMI removal with extra payments

On a conventional loan, every dollar of extra principal moves you closer to the 80% borrower-request threshold. Here's how to estimate the impact — and the caveats.

Why extra payments accelerate PMI cancellation

Loan-to-value is the loan balance divided by the home value. Extra principal payments reduce the numerator, which reduces LTV faster than scheduled amortization alone. Hitting 80% LTV (borrower-requested cancellation) earlier means fewer months of PMI premium, which is real money — typical conventional PMI runs 0.3%–1.5% of the loan amount per year.

Worked example

Suppose you bought a $400,000 home with 5% down ($380,000 loan, 95% start LTV) at 6.5% over 30 years, and your PMI rate is 0.6% — about $190/month. Scheduled amortization alone reaches 80% LTV (loan balance of $320,000) around year 8. Adding $200/month in extra principal can pull that milestone forward by roughly 18–24 months, eliminating $4,000–$5,000 of cumulative PMI premium on top of the direct interest savings.

Borrower-requested vs. automatic — the subtle difference

Federal law's automatic 78% termination is based on the scheduled amortization, so extra payments don't move that date. But the 80% borrower-requested cancellation is based on your actual balance, which extra payments do move. In practice, this means you should track when your actual balance crosses 80% of the original value and submit a written cancellation request — your servicer can't cancel automatically just because you're ahead of schedule.

How to model it

Open the PMI calculator and enter your home value, loan amount, rate, term, and PMI rate.
Note the projected 80% and 78% milestone dates with no extras.
Add a monthly or annual extra payment amount. Re-check the projected milestone dates.
Cross-check the cumulative interest savings in the extra payment calculator.

Caveats

Confirm your servicer applies extras to principal, not as a future scheduled payment.
Your servicer may require a clean payment history (often the past 12–24 months) before honoring an early cancellation request.
If your home has appreciated, a fresh appraisal showing current LTV ≤ 80% (or 75% on newer ownership) may let you cancel even faster than extra payments alone.
Don't prioritize extra principal over building an emergency fund or capturing employer retirement matches.

Frequently asked

How much extra do I need to pay to cancel PMI a year early?: Roughly speaking, you need to retire enough principal one year ahead of schedule. On a $380,000 loan amortizing toward 80% LTV, that's typically $5,000–$10,000 of extra principal applied in the year before the target milestone. The exact number depends on your rate and remaining term — check your specific scenario in the calculator.
Will the servicer cancel PMI automatically if I prepay enough?: No. Automatic 78% termination is based on the original amortization schedule. If you've prepaid to where your actual balance is below 80% of original value, you have to file a written request — the servicer is allowed (and often required) to cancel based on it.
Should I prepay or save up for a 20% down purchase next time?: Different question entirely. Prepaying accelerates current PMI cancellation. Saving up changes the next purchase. Both can make sense — neither is universally better.

Sources and references

Helpful consumer references used to explain assumptions on this page. These are educational pointers, not regulatory endorsement.

CFPB — PMI cancellation overview — consumer overview of how PMI works and how to request cancellation under federal law
Internal — amortization with extras — the engine reduces principal immediately when extras are applied